09 Feb 2010

Peninsula Link financial close another milestone for Clayton Utz

Melbourne, 9 February 2010: Leading law firm Clayton Utz continues to be at the forefront of big-ticket infrastructure activity in Australia, with the announcement of financial close yesterday of the $759 million toll-free Peninsula Link project in Victoria marking yet another milestone for the firm's Major Projects practice.

A Clayton Utz team led by Melbourne-based Major Projects partners Marko Misko, Naomi Kelly and Dan Fitts has been providing strategic legal and commercial advice to the Linking Melbourne Authority on all aspects of the project.

This has included the Environmental Effects Statement (EES) and project definition phase, procurement issues and risk allocation associated with the selection of the first availability charge based road PPP project model, the development and review of the full suite of project documentation, advice and project management of the Expression of Interest and Request for Proposal phase, approvals, the selection of the successful bidder, finalisation and execution of the project documentation and Financial Close.

Although availability charge model PPPs are well-established in the social infrastructure sector, the use of this model with the Peninsula Link project is a first for road PPP projects in Australia, which have traditionally required the private sector to assume patronage risk.

Mr Misko said the firm was proud to be working alongside the Victorian Government and the Linking Melbourne Authority (who ran the Peninsula Link tender) to assist it in delivering an innovative project that represents the next generation of road sector PPPs and incorporates the valuable lessons learnt from previous similar projects over the last decade.

"The Peninsula Link project was delivered in record time - 9 months from Expression of Interest phase to Contract Close. This was achieved by utilizing innovative tendering processes, sophisticated risk allocation and highly streamlined project documentation developed by Clayton Utz. As a result, significant time efficiencies were gained and project bid costs for both the State and private sector bidders were minimized. The pragmatic, can-do attitude and strong leadership of the Linking Melbourne Authority was a key contributor to achieving the project's ambitious deal-closure timelines," Mr Misko said.

Peninsula Link will involve a major construction effort, with 27 kilometres of freeway standard road, 11 local road connections and more than 35 bridges and will cut travel times between Mt Martha and Carrum Downs to just 17 minutes. The Victorian government has awarded the contract to build and deliver the project to the Southern Way consortium.

"On the right projects and despite the changed financial market conditions, Public Private Partnerships are able to help governments deliver much needed infrastructure quickly to the community and achieve better quality infrastructure assets. They are better able to harness private sector technological and cost innovation over the longterm." said Mr Misko.

Clayton Utz is the leading adviser to both government and the private sector on all aspects of major infrastructure and PPP projects, including various projects being built around the country such as the Desalination, M1 Corridor Upgrade, EastLink, and AgriBio, the Centre for AgriBio (previously known as the Biosciences Research Centre project) in Victoria, the Clem7 Tunnel and Airport Link projects in Queensland, and the New Royal Adelaide Hospital project in South Australia.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.